Hart: Cronyism, conflicts of interest cloud cancer research

Updated 10:42 pm, Saturday, June 23, 2012

Looking back at the rocky start of Texas' grand scheme to cure cancer, it's not exactly surprising that the ambitious project has become mired in charges of cronyism and conflicts of interest.

After all, it was conceived under a cloud of cronyism and conflicts of interest.

Gov. Rick Perry first suggested a $3 billion fund for cancer research during his February 2007 State of the State address to the Texas Legislature. His brilliant notion for financing the project? Sell the state lottery.

Lucky thing: Perry's political mentor, former U.S. Sen. Phil Gramm, just happened to be in the market for state lotteries. And he had recently made a pitch for purchasing the Texas Lottery on behalf of his then-employer UBS. Gramm, it should be remembered, gave Perry $610,000 in campaign contributions upon his retirement from politics.

The coziness didn't sit well with legislators, who were cool to the lottery sale - but the cancer research idea took on a life of its own. Eventually, state leaders decided to fund the project through the sale of $3 billion in bonds. When the question was put to voters, the wording had the appeal of flag and apple pie: "authorizing the issuance of up to $3 billion in bonds payable from the general revenues of the state for research in Texas to find the causes of and cures for cancer."

Who could vote against finding the causes and cures of cancer? No one listened when the Scrooge of the Texas Senate, Finance Chairman Steve Ogden, questioned the wisdom of getting into serious debt for what historically has been a function of the federal government. Lawmakers were star-struck when Tour de France superstar Lance Armstrong showed up at the Capitol to root for the project. "Everyone was in an emotional frenzy," Ogden recalled last week. "I got run over by a guy on a bicycle."

Fast-tracked grant

Before the election, Harris County conservative Republicans sounded the alarm that the proposal was "financial folly," in the words of precinct chair Ron Brunner. "The Republican Party has always stood for taxpayers and voters, especially on the financial spectrum," Brunner told the Chronicle before the 2007 election. He lamented that Republican leaders were afraid of questioning the project because "if you are not for it, you are an evil-doer."

Voters signed off on "finding the causes and cures of cancer," but two factions have developed within the cancer project: those who want to emphasis basic research, and those who believe the state can make best use of its money through commercialization. One has to wonder if voters would have approved the fund if they had been asked to go into debt to help start new private companies.

Instead, the grant was reviewed and approved by the institute's commercialization review council, whose members include two people with ties to the approved project. A third member of the council is on the board of directors of Aveo Oncology, a biotech company founded by M.D. Anderson's president Ronald DePinho. And DePinho's wife, Lynda Chin, will head M.D. Anderson's portion of the commercialization project.

Houston venture capitalist Charles Tate served on both the institute and M.D. Anderson boards, and encouraged approval of the grant. Tate, whose firm invests in new drug developments, has contributed large sums to both Perry and Lt. Gov. David Dewhurst. One company he invested in, Thrombovision, received a $1.5 million award from Perry's Emerging Technology Fund - another state government honey pot plagued by inside dealing.

All very cozy, just like Perry's lottery sale scheme.

Last week, Ogden declined the opportunity to say "I told you so." Despite the recent controversy, he said he's been impressed with the cancer project's track record for luring top-notch scientists to Texas. He said it was natural for tension to exist between research and commercialization efforts: "If research doesn't have a goal of a practical application, then what good is it?"

Stick to the rules

Still, the Legislature should keep pressure on the agency to adhere to strict rules against conflicts of interest. When the cancer project was initiated, it adopted "scrupulous" rules for disbursing grants, Ogden said. That means it promised not to cut corners.

Already, the agency has taken steps to restore public trust - for instance, inviting in the state auditor to review its operations. If the project's toughest critic remains optimistic, perhaps it can still choose its legacy: a cure for cancer, or crass cronyism.